Companies incur significant amounts of share issue costs to raise finance for their operations. The South African Revenue Service (SARS) currently contends that value added tax (VAT) is not deductible on share issue costs. This view is based on the ITC 1744 case. The judgment in ITC 1744 relied on the views expressed in a European case decided in 1994. Since then the question of the deductibility of VAT incurred on share issue costs has been considered in a number of judgments in the European Court of Justice (ECJ) and it was held that in certain circumstances input tax may be deducted. In this article, the question is posed whether arguments similar to those followed by the ECJ may be advanced in South Africa. Based on the analysis of the reasoning followed in the ECJ judgments in the context of the South African legislation it is submitted that compelling grounds may exist to argue that a share issue does not constitute a supply and that share issue costs may be viewed as general costs to the business. This argument may prompt SARS to reconsider its view held on the deductibility of VAT levied on share issue costs in South Africa.